NEC Leverages RISE with SAP and AI to Build Business AI in Move to the Cloud
SAP SE announced that NEC will adopt SAP S/4HANA Cloud via the RISE with SAP solution on AWS, with support from ABeam Consulting. This cloud migration is part of NEC's strategy to optimize costs and streamline data systems using generative AI technology.
The transition involves moving from an on-premise system with 1,200 add-ons and 200 interfaces to a cloud-based clean-core model. NEC's generative AI and SAP's Joule copilot will automate critical processes to enhance efficiency and reduce costs. This initiative aligns with NEC's 2025 mid-term management plan, aiming to drive digital transformation within the company and society.
NEC President, Takayuki Morita, highlighted the significance of leveraging internal innovations for broader societal benefits. SAP CEO, Christian Klein, emphasized the partnership's role in fostering sustainable digital transformation.
- NEC's migration to SAP S/4HANA Cloud aims to optimize costs and streamline data systems.
- Adoption of a clean-core approach will reduce future upgrade and operational costs.
- Automation through generative AI and SAP's Joule copilot is expected to improve operational efficiency.
- The project supports NEC's 2025 mid-term management plan for digital transformation.
- NEC will be among the first to leverage SAP's AI tools for migration, setting a new industry standard.
- The partnership underscores NEC's commitment to technological adoption and societal contributions.
- NEC's current system complexity with 1,200 add-ons and 200 interfaces poses significant migration challenges.
- The transition process may involve substantial initial costs and resource allocation.
- Potential risks associated with the reliance on generative AI for critical processes.
Insights
NEC's shift to SAP S/4HANA Cloud, supported by generative AI and SAP's Joule copilot, reflects a significant move in the technology landscape. This migration showcases the potential of combining cloud technology with advanced AI to optimize business processes and reduce costs. The key innovation here is the use of generative AI to streamline the migration process, which involves automating tasks like add-on analysis, code generation and test automation. These tasks are typically labor-intensive and costly, making AI-driven automation a substantial cost and time saver.
Moreover, NEC's adoption of a clean-core approach, which prioritizes standard software offerings and minimizes customizations, aligns with best practices for cloud migration. This approach reduces the complexity and cost of future upgrades, ensuring more efficient and scalable operations. From a technological standpoint, this move positions NEC at the forefront of digital transformation, leveraging cutting-edge AI to enhance operational efficiency and agility.
The financial implications of NEC's migration to SAP S/4HANA Cloud are noteworthy. By automating critical processes and adopting a clean-core approach, NEC is expected to significantly reduce operational costs. These cost savings stem from lower maintenance costs and more efficient version upgrades. It's important to note that while there may be substantial initial investment costs associated with the migration, the long-term financial benefits could outweigh these expenditures. For investors, this move signals NEC's commitment to leveraging technology for cost optimization and efficiency, potentially leading to improved profit margins and a stronger financial position in the mid to long term.
Furthermore, NEC's partnership with SAP, a trusted name in enterprise applications, adds a layer of credibility to this initiative. The collaboration emphasizes a shared vision of digital transformation and societal impact, which can enhance NEC's brand value and investor confidence.
From a market perspective, NEC's migration to SAP S/4HANA Cloud and the use of generative AI positions the company as an innovator in digital transformation. This strategic move could serve as a blueprint for other businesses looking to migrate to the cloud, providing NEC with a competitive advantage. By leading with technological adoption and societal contributions, NEC is likely to attract positive attention from both customers and investors. Additionally, the adoption of SAP's Joule copilot for natural language processing highlights the growing trend of integrating AI assistants to streamline business operations. This reflects a broader industry shift towards more intelligent and automated enterprise solutions.
NEC's emphasis on digital transformation aligns with global market trends where businesses are increasingly focused on leveraging AI and cloud technologies to stay competitive. This move could potentially open up new revenue streams and enhance NEC's market position in the IT and network technology sectors.
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NEC is currently operating a large-scale system that includes 1,200 add-ons and more than 200 external interfaces. To migrate to the cloud, NEC will use generative AI to facilitate a clean-core transformation, streamline migration costs and improve operational efficiency. NEC's generative AI and SAP's Joule copilot for natural language processing will automate critical processes such as add-on analysis, report interpretation, code generation from specifications and test automation. Joule is SAP's generative AI assistant that understands the user's unique role and acts as a work copilot across SAP applications to streamline tasks. NEC will be among the first companies to leverage AI tools from SAP to streamline its migrations.
"NEC sees itself as the first customer of its own innovations, applying cutting-edge technologies internally and sharing the gained insights and know-how with customers and society," NEC President and CEO Takayuki Morita said. "This milestone implementation with SAP creates a new industry blueprint for other businesses looking to migrate to the cloud, underscoring NEC's commitment to leading by example in technological adoption and societal contributions."
By migrating to SAP S/4HANA Cloud, NEC anticipates more-efficient system operations by tapping into AI to support version upgrades and reduce future operation-related costs while being able to quickly respond to market changes. By leveraging innovative technologies including AI, NEC aims to digitally drive societal and industry transformations. This migration to the cloud is a key part of NEC's 2025 mid-term management plan focusing on internal, customer and societal digital transformations.
"Our shared vision with NEC of creating a sustainable society through digital transformation is the foundation for our long-term partnership," said Christian Klein, CEO and member of the Executive Board of SAP SE. "This project marks a milestone in our relationship, and we're excited to support NEC on their continued transformation journey."
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